The South Carolina Bar Foundation has proposed
amending Rule 412, SCACR, which governs Interest on Lawyer Trust Accounts
(IOLTA), to establish a more specific comparable interest rate rule for trust
accounts governed by Rule 412. Following a public hearing, the Bar Foundation
and the South Carolina Bankers Association agreed to a number of amendments,
including a benchmark rate within Rule 412(c)(2)(B). The parties also agreed to
a six month implementation period, so that financial institutions who choose to
participate in IOLTA have sufficient time to implement changes to accounts and
upgrade automated systems.

We
grant the Bar Foundation's request to amend Rule 412, SCACR, as set forth in
the attachment to this Order. The amendments shall be effective June 15, 2010.

IT IS SO ORDERED.

s/Jean H. Toal C.J.

s/John H. Waller, Jr. J.

s/Costa M. Pleicones J.

s/Donald W. Beatty J.

s/John W. Kittredge J.

Columbia, South
Carolina
December 17, 2009

RULE 412INTEREST ON LAWYER TRUST ACCOUNTS
(IOLTA)

(a)
Definitions. As used herein, the term:

(1) "Nominal
or short-term" describes funds of a client or third person that, pursuant
to section (d) below, the lawyer has determined cannot provide a positive net
return to the client or third person;

(2) "Foundation" means
the South Carolina Bar Foundation, Inc.;

(3) "IOLTA
account" means a trust account benefiting the South Carolina Bar
Foundation established in an eligible institution for the deposit of pooled
nominal or short-term funds of clients or third persons. The account product
may be an interest-bearing checking account; a money market account with or
tied to check-writing; a sweep account which is a government money market fund
or daily overnight financial institution repurchase agreement invested solely
in or fully collateralized by United States government securities; or an
open-end money market fund solely invested in or fully collateralized by United
States government securities.

(A) "Open-end
money market fund" is a fund holding itself out as a money market fund as
defined by applicable federal statutes and regulations under the Investment Act
of 1940 and, at the time of the investment, having total assets of at least
$250,000,000.

(B) "United
States government securities" are United States treasury obligations and
obligations issued or guaranteed as to principal and interest by the United
States or any agency or instrumentality thereof, including obligations of
Government Sponsored Enterprises.

(4) "Eligible
Institution" means any bank or savings and loan association authorized by
federal or state laws to do business in South Carolina and insured by the
Federal Deposit Insurance Corporation or any successor insurance corporation(s)
established by federal or state laws.

(1) All nominal
or short-term funds belonging to clients or third persons that are placed in
trust with any member of the South Carolina Bar practicing law from an office
or other business location within the state of South Carolina shall be
deposited into one or more IOLTA accounts, except as provided in Rule 1.15 of
Rule 407, South Carolina Appellate Court Rules, with respect to funds
maintained other than in a bank account and as provided in section (i) below.

(2) A law firm
of which the lawyer is a member may maintain the account on behalf of any or
all lawyers in the firm.

(c)
Depository Procedures.

(1) The IOLTA
account shall be established with an eligible institution that voluntarily
chooses to participate. Funds deposited in each IOLTA account shall be subject to
withdrawal upon request and without delay, subject only to any notice period
which the institution is required or permitted to reserve by law or regulation
and as provided in Rule 1.15 regarding safekeeping of client property.

(2) The rate of
interest or dividends payable on any IOLTA trust account shall be no less than:

(A) the
highest interest rate or dividend generally available from the institution to
its non-IOLTA customers for each IOLTA account that meets the same minimum
balance or other eligibility qualifications, if any. In determining the
highest interest rate or dividend generally available from the institution to
its non-IOLTA customers, the institution may consider factors, in addition to
the IOLTA account balance, customarily considered by the institution when
setting interest rates or dividends for its customers if such factors do not
discriminate between IOLTA accounts and accounts of non-IOLTA customers and
these factors do not include that the account is an IOLTA account. The
institution also shall consider all product option types noted at (a)(3) for an
IOLTA account offered by the financial institution to its non-IOLTA customers
by either establishing the applicable product as an IOLTA account or paying
the comparable interest rate or dividend on the IOLTA checking account in lieu
of actually establishing the comparable highest interest rate or dividend
product; or

(B) an
eligible institution may choose to pay a rate equal to the greater of 0.65% or
65% (the "index") of the Federal Funds Target Rate (the "benchmark")
as of the first business day of the IOLTA remitting period, which rate is
deemed to be net of reasonable fees, on an IOLTA checking account. The index
and benchmark are determined periodically, but not more frequently than every
six months, by the Foundation to reflect an overall comparable rate for the
South Carolina Bar Foundation. When applicable, the Foundation will express
its benchmark in relation to the Federal Funds Target Rate.

(3) Eligible institutions
may choose to pay rates higher than comparable rates described at (c)(2) above.

(d)
Determination of Nominal or Short-Term Funds.

(1) The lawyer
shall exercise good faith judgment in determining upon receipt whether the
funds of a client or third person are nominal or short-term. Client or third
person funds shall be deposited in a lawyer's or law firm's IOLTA account
unless the funds can earn income for the client in excess of the costs incurred
to secure such income.

In the exercise of this good faith judgment and determining whether a
client's funds can earn income in excess of costs of securing that income for
the benefit of the client or third person, and thus provide a positive net
return to the client or third person, the lawyer or law firm shall consider the
following factors:

(A) the
amount of funds to be deposited;

(B) the
expected duration of the deposit, including the likelihood of delay in the
matter for which the funds are held;

(C) the rates
of interest or yield at financial institutions where the funds are to be
deposited;

(D) the cost
of establishing and administering non-IOLTA accounts for the benefit of the
client or third person, including service charges, the costs of the lawyer's
services, and the costs of preparing any tax reports required for income
accruing to the benefit of the client or third person;

(E) the
capability of financial institutions, lawyers or law firms to calculate and pay
income to individual clients or third persons; and

(F) any
other circumstances that affect the ability of the client's or third persons'
funds to earn a net return for the client or third person.

The lawyer or
law firm shall review its IOLTA account at reasonable intervals to determine
whether changed circumstances require further action with respect to the funds
of any client or third person.

(2) The
determination of whether a client's or third person's funds are nominal or
short-term shall rest in the sound judgment of the lawyer or law firm. No
lawyer shall be charged with ethical impropriety based on the exercise of such
good faith judgment.

(3) Notification
to the client is not required nor shall the client or third person have the
power to elect whether nominal or short-term funds shall be placed in the IOLTA
account.

(4) The
provisions of section (c) shall not relieve a lawyer or law firm from an
obligation imposed by Rule 1.15 of the Rules of Professional Conduct with
respect to safekeeping of client property.

(e)
IOLTA Refund Procedures. The Foundation shall establish
procedures for the processing of refund requests for such instances as bank or
lawyer error.

(f)
Notice to Foundation. Lawyers or law firms shall advise the Foundation, at
Post Office Box 608, Columbia, SC 29202-0608, by facsimile at (803) 779-6126,
or in such other manner as the Foundation publishes in its materials is
acceptable, of the establishment and closing of an IOLTA account for funds
covered by this rule. Such notice shall include: the name of the institution
where the IOLTA account is established; the IOLTA account number as assigned by
the institution; the institution address; and the name and South Carolina Bar
attorney number of the lawyer, or of each member of the South Carolina Bar in a
law firm, practicing from an office or other business location within the state
of South Carolina that has established the IOLTA account.

(g)
Certification. Each
member shall certify annually on the member's license fee statement submitted
pursuant to Rule 410, South Carolina Appellate Court Rules, that the member is
in compliance with the provisions of this rule or, pursuant to section (i)
below, has been approved by the Foundation as exempt from the provisions of
this rule.

(h)
Remittance and Reporting Instructions. A lawyer or law firm depositing
client funds in an IOLTA account shall direct the depository institution to:

(1) calculate
and remit interest or dividends, net of reasonable service charges or fees, if
any, on the average monthly balance in the account or as otherwise computed in
accordance with the institution's standard accounting practice, monthly to the
Foundation, which shall be the sole beneficial owner of the interest or
dividends generated by the accounts;

(2) transmit
monthly to the Foundation a report, listing by account the name of the lawyer
or law firm for whom each remittance is made, the lawyer's or law firm's IOLTA
account number as assigned by the institution, the rate and type of interest or
dividend applied, the average account balance for the reporting period or the
other amount from which interest or dividends are determined, the amount of
each remittance, and the amount and type of any service charges or fees
assessed during the remittance period, and the net amount of interest remitted
for the period;

(3) transmit at
least quarterly to the depositing lawyer or law firm, a report or statement in
accordance with normal procedures for reporting to its depositors.

"Reasonable
fees" as defined in (a)(5) may be deducted from interest or dividends on
an IOLTA account provided that such charges or fees shall be calculated in
accordance with an eligible institution's standard practice for non-IOLTA
customers. No other fees or charges shall be assessed against the interest on
an IOLTA account, but rather shall be the responsibility of, and may be charged
to, the lawyer or law firm maintaining the IOLTA account. Fees or charges in
excess of the interest or dividend earned on the account for any month shall
not be taken from interest or dividends earned on other IOLTA accounts or from
the principal of the account. Eligible institutions may elect to waive any or all
fees on IOLTA accounts.

(i)
Exempt Accounts. The Foundation will establish procedures for a
lawyer or law firm to maintain an interest-free trust account for client and
third-person funds that are nominal or short-term when the lawyer's or law firm's
account cannot reasonably be expected to produce or has not produced over time
an interest income net of reasonable service charges or fees.

(j)
Program Administration. The Foundation shall, in accordance with
its charter and by-laws, receive, administer, invest, disburse and separately
account for all funds remitted to it through this program.

Last
amended by Order dated December 17, 2009, and effective June 15, 2010.